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How much will your self-build project cost?

Self-build offers an unparalleled chance to build a dream home from scratch, but you shouldn't underestimate the financial responsibility that goes along with this opportunity.

In this guide, we'll break down the major costs of a self-build project, as well as some of the hidden price tags that many first-timers overlook.

A brief introduction

Whether you plan to sell your home on, or remain in it – self-build projects can be lucrative. Not only do you save on VAT, but you can expect the cost to be about 15 to 20 per cent less than if you'd bought the same property outright.

When considered alongside the fantastic customisation that going down the self-build route makes possible, it's an investment with a clear payoff. However, the trade-off is the increased onus on you to make sure things proceed smoothly.

As such, it's vital to have a handle on costs during the planning stage and keep an eye on this throughout the project to ensure you aren't overspending.

So without further ado, let's look at some of the biggest issues that are likely to impact your wallet.

Getting a plot

If you're selling your current home to finance your project, you'll need to take the estate agent fees into account. Traditional agents will charge you a percentage of the asking price of the property, although new online-only agents let you take on more responsibility (e.g. arranging and conducting viewings) in exchange for a fixed fee.

You'll also need a conveyancer to facilitate the legal exchange, which is typically a few hundred pounds and factor in any stamp duty you'll have to pay on the plot. This is a bracketed scale that currently stands at:

  • 2% on any amount over £125,000
  • 5% for the next £675,000
  • 10% for the next £575,000
  • 12% for anything more than £1.5 million.

However, you only pay the levy on the percentage that falls over the bracket, so if your plot cost £125,500 – you'd only pay two per cent of £500 (£10).

If your plot is worth more than £125,000 – you'll also have to pay to register the transaction with HM Land Registry.

Up-front costs

While you're probably well aware of what you'll have to pay for design and construction, what many first-timers overlook is the money they'll need to put down before the project even commences.

This includes non-intuitive stuff like water and electricity, which you might not expect to have needed until you neared completion. However, having a power source close by will prove exceptionally useful throughout and access to water is simply a necessity. You'll also have to pay connection fees for these, which can be upwards of £2,000 – depending on how far away you are from mains supplies.

And where there's water – there needs to be drainage. If you can't discharge your waste water directly in the council's pipeline – you'll also need to take the cost of installing your own septic tank or treatment plant into account. Expect to shell out at least £1,500 for a basic tank and up to £5,000 for a treatment plant.

As such, once your plans are just about finalised, you'll want to obtain quotes from service providers so you can factor these in. It's not possible for us to give solid figures on these, as the ease of supply will depend on where your plot is situated and other factors – such as if the service access requires traffic lights to be put up.

If you're managing things yourself, you'll need to take security into account, which can necessitate a lock-up, if not a full blown site office. One cost-effective way to tackle this is to buy a shipping container to serve as both. Costs for this will start at around £500 up to £1,700 – depending on size – which you may be able to sell-on after. Similarly, you'll also need to provide toilet facilities for your contractors, which will cost around £100 each month to hire.

Plant and equipment hire

If you're managing your own project, you have to consider issues far beyond labour costs (between £120-£200 a day). Although your contractor might have its own favoured providers – you'll want to consider the costs of hiring equipment like a digger (about £250 a day), piping (around £15-£25 per metre), ducting (roughly the same), standpipe (£50), metre boxes (£70) and hardcore (£45).

However, problems can and will occur so make sure you've left wiggle room for inevitable delays. While you can purchase materials in dribs and drabs from builder's merchants – you'll probably want to benefit from the cost reduction associated with bulk loads. Expect these savings to be somewhat offset by the additional labour costs you'll have to pay when there's hold-ups though.

 

Structural Defects Insurance

Wastage

No matter how careful your plans, there's always going to be some degree of wastage. While you might seek to save money by opting for reclaimed or re-usable materials – this can be something of a double-edged sword, given that these are prone to irrevocable problems.

Using a hodgepodge of reclaimed materials can also slow work, due to the corrections needed to make them fit together properly. This, of course, will necessitate additional time and associated labour costs. Comparable problems can also occur if you're looking to use novel techniques or traditional materials that might necessitate hiring in expertise beyond your contractors.

Similarly, whether building from scratch or converting an existing property, expect to uncover further issues that need to be resolved as the project continues. While these should be few and far between in a new build, they can be rife in conversions – so make sure you set aside enough budget to cover these shortcomings when they arise.

While not inevitable – and much less likely if you've invested in a decent lock-up – vandalism can also occur. And while you, or your contractor, will have the insurance necessary to protect against this – there is often an excess associated with such policies. Depending on the value of the equipment, expect to pay at least a couple of hundred pounds.

Insurance and warranties

While we've covered this in more depth in previous guides, not opting for the proper cover for your project can be a definite false economy. Should the worst happen, you'll have to pay out for any repairs needed to your property, which can be sizeable, depending on the sort of issue that occurs.

The size and complexity of your project will influence your insurance premiums, but expect to pay out at least £500 in premiums.

Warranties, like structural defects insurance, are also likely to fall in a similar price range, but if you're interested in a competitive quote – be sure to get in touch.

Planning

There's a fee attached to planning applications and it must be paid on submission. This is set nationally by the government and it hosts details of all its fees on its Planning Portal. However, some of the most relevant for self-builders include:

  • £385 per 0.1 hectare for site up to and including 2.5 hectares
  • £9,527 plus £115 for each 0.1 hectare (where sites are over 2.5 hectares), up to a maximum of £125,000.
  • £172 for alterations and extensions to a single dwelling
  • £385 full applications for new dwellings.

Time and effort

Project managing your own self-build is a full-time job, so last – but not least – be sure to factor in the loss of income and expenses you'll incur in your role. While you can try and fit it into evenings and weekends, don't underestimate the amount of effort you'll need to put in to make sure things proceed smoothly.

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